County Taxes - Reviews and Bulletins

Semi-Annual Tax Payment Program

Highlights

Beginning in July 2000, all taxpayers living in their principal residence pay their real property taxes on a semi-annual schedule unless they elect to make both payments on or before September 30th.

Eligible taxpayers must pay one-half of their tax liability on or before September 30th, and the second half on or before December 31st.

Taxpayers who escrow their tax payment may elect to pay annually (that is, make both payments on or before September 30th). However, they must notify their lender by May 1st of their desire to pay annually.

Taxpayers who do not escrow their taxes will receive a tax bill that will permit them to pay on either a semi-annual or annual basis.

Personal property taxes, taxes on residential rental units, and taxes on commercial real property are not eligible for the semi-annual schedule.

Additional Information

In 1995, the State of Maryland Legislature enacted the semi-annual real property tax payment program (Program). The Program made it mandatory for counties to provide taxpayers with this option for the payment of real property taxes. The purpose of this legislation was to help reduce closing costs associated with the purchase of homes in Maryland, effectively reducing the amount of cash new homebuyers need.

For tax levy year 2000 and beyond, the program became mandatory for all eligible real property owners. It is assumed that all eligible real property taxpayers will pay semi-annually unless they elect to make both installment payments on or before the first installment date, September 30th.

The Program applies only to real property taxes, not personal property taxes. Personal property taxes must be paid annually. As for real property taxes, only owner-occupied residential property owners are eligible to participate in the Program. Accordingly, taxpayers with residential rental property or property owners with mailing addresses other than the premise address will receive tax bills that will not permit a semi-annual payment for that property.

All taxpayers in Montgomery County receive a copy of their tax bill, regardless of who actually pays the tax bill. If you are paying your taxes yourself, your tax bill will indicate the semi-annual first and second installment payment amounts and an optional full payment amount. A taxpayer may choose either option. If you are escrowing your tax payment with your lender (included with your monthly mortgage payment), Maryland law requires that you must notify your lender of your intention to pay your taxes annually by May 1st, preceding the tax levy year. (For example, you must notify your lender by May 1, 2006, that you desire to pay your tax levy year 2006 taxes on an annual basis.) If no notice is given to the lender, the lender will pay the taxes in semi-annual installments.

You do not have to notify the County.

For your information, the front of the tax bill will indicate whether your lender, if any, requested a copy of your bill. If the "Mortgage Information" field on the tax bill is blank, then your lender did not request a copy of your bill. A name in the "Mortgage Information" field indicates the company that requested a copy of your tax bill. Please keep in mind that the County does not keep records as to who owns a particular mortgage throughout the year - mortgages are sold and resold too frequently to keep that information current. The County must rely on the mortgage companies/lenders to request copies of bills for their mortgagors.

If you have questions concerning the semi-annual property tax payment program, please contact the County’s Department of Finance:

Montgomery County Refundable Earned Income Credit

In 1999, Montgomery County was the first local jurisdiction in the nation to introduce a Refundable Earned Income Credit (EIC). The County’s Refundable EIC program is patterned after the Maryland State program, and became effective tax year 1998.

Under the County program, Montgomery County, generally, matches the State Refundable EIC dollar-for-dollar. During tax year 2003, more than 18,000 checks were mailed to eligible county residents.

Due to the close cooperation between the Maryland Office of the Comptroller (Comptroller) and Montgomery County Government (MCG), the administration has been kept to a minimum, which reduced the cost of the program and removed the additional requirement for eligible residents to file separately for the County program.

Combined with the financial benefit that a Refundable EIC offers to low-income working residents, the Montgomery County Refundable EIC program has become a success.

TAX RETURNS FILED:

CHECKS MAILED:

THROUGH JUNE

END OF JULY

JULY THROUGH SEPTEMBER

END OF OCTOBER

THROUGH DECEMBER

END OF JANUARY

Note: The above schedule pertains to tax returns filed for the prior year,
e.g. checks will be mailed at the end of July 2013 for returns for tax year 2012 filed in April 2013.

Administration

Under the County program, eligible residents receive a check from the Comptroller, but paid for by Montgomery County. Since the Comptroller verifies eligibility, residents who qualify receive, generally, identical Refundable EIC checks from both the State and the Montgomery County programs. This simplifies the administration and holds down the cost. State and County Refundable EIC checks are mailed separately.

Eligibility

Eligibility for the State Refundable EIC is determined by the taxpayer when the income tax return is filed, and verified by the Comptroller. In the tax year for which the State Refundable EIC is claimed, taxpayers must have earned income, be eligible for the federal EIC, claim the Maryland EIC, and have at least one dependent. In order to receive the County Refundable EIC, the resident must be eligible for the State Refundable EIC and have filed, as a Montgomery County resident, for the tax year in which the Refundable EIC is claimed.

Specific Issues

The Comptroller for the State of Maryland maintains all income tax and tax return information. Hence, since the County does not have access to such confidential data, all questions regarding eligibility for the County program must be addressed to the Comptroller.

Under Maryland law, before the State may issue a refund check (including the Refundable EIC) the Comptroller must first check for any outstanding liabilities - including prior year income taxes, tuition fees, and child support. This is referred to as the State's tax offset program. Hence, although a taxpayer may be eligible for a Refundable EIC, either a part or the full amount of the refund may be used to offset outstanding debt obligations.

For the majority of eligible recipients the County Refundable EIC will equal the State Refundable EIC amount. However, there may be differences: (i) One difference is that in contrast to the State tax offset program, which reviews for outstanding child support, there is no tax offset for this category for the County Refundable EIC; (ii) The County may increase the matching amount in any one tax year.

Even though taxpayers may receive one State check from the Comptroller that combines the refund for excess withholding taxes and State Refundable EIC, Montgomery County matches only the State Refundable EIC portion.

Taxpayers claiming eligibility for a prior tax year, for example an amended income tax return, must contact the Comptroller. After the Comptroller verifies eligibility and the amount of the County Refundable EIC, the County will be notified and a Montgomery County check will be mailed to the taxpayer.

Taxpayers who lose their County Refundable EIC check or the check was not cashed in time, and became void after 6 months from the date of issuance, must contact the Comptroller to apply for re-issuance of the check. After the information is verified by the Comptroller, the County will be notified and a Montgomery County check will be mailed to the taxpayer.

Taxpayers who are eligible for the Montgomery County Refundable EIC, but moved prior to receiving the Maryland Refundable EIC, should immediately notify the Comptroller of their new address.

Contacts

Questions regarding eligibility for either the State or Montgomery County Refundable EIC must be addressed to the Maryland Office of the Comptroller: (800) MDTAXES or (410)260-7980.